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Walking around the annual B Lab Champions Retreat conference in Los Angeles, I am struck by the positivity and optimism in the air. Patagonia CEO Rose Marcario stops by to give a rousing keynote, thanking the B Corps community for its tireless support for the idea of business as a force for good. The passion and enthusiasm of the attendees is self-evident; from social entrepreneurs creating their own start-ups to representatives from some of the world’s biggest businesses, the conversation is about this profound moment of possibility that we seem to be in.

A lot of the credit for this moment has to go to B Lab, the organization behind the B Corps and Benefit Corporation movement that has been promoting business as a force for good for over a decade, who have been transitioning companies to a stakeholder (vs. shareholder) driven business model, by helping companies manage their social and environmental impact. Businesses that meet the highest levels of performance, accountability and transparency against social and environmental impact are certified as B Corporations. Today there is a community of over 3,000 Certified B Corporations, including companies like Patagonia, Allbirds, Cotopaxi, Eileen Fisher, Seventh Generation, Participant Media and Danone North America spanning 70 countries and 150 industries.

Warm and insightful, Anthea Kelsick is the Chief Marketing Officer at B Lab. I caught up with her to find out her thoughts on this moment of potential, especially given the recent Business Roundtable announcement. “When we heard the news about the Business Roundtable, we were excited at the opportunity to engage with some of the world’s largest companies with the biggest reach to help them move along the pathway to becoming Certified B Corporations, or at least be better businesses. And while we’ve been leaders in this space for over a decade, the announcement was also a moment of recognition that mainstream cultural narratives of business are shifting. It’s about time more companies join us on this journey to establishing what the real role of business in society should be”.

A full-page ad in the New York Times from leading B Corps like Patagonia, Seventh Generation and Ben and Jerry’s welcoming the announcement was a start. “Our intention with the letter in the New York Times was first to make them aware that this model of business is not new and that there are experts, leaders, and beacons in this space already called Certified B Corporations. And second, the intention was to reach out to them to extend a hand and offer our expertise, guidance, and support for making a real transition to stakeholder governance. Lastly, we wanted to challenge them to go beyond the first step of making their statement, and actually encourage them to take meaningful action. We know that these Business Roundtable companies will face challenges in their evolution toward true stakeholder-led corporate governance, and we have the best practices and expertise in governance structure and real business innovation that can help them get there.”

The New York Times B Corps Ad

B Lab

Kelsick expanded more about the idea of ‘stakeholder capitalism’ that B Lab has been championing and how companies can benefit from this approach. “Stakeholder capitalism by definition is not just about how companies benefit. It’s about how all of us and our planet can benefit. Stakeholder capitalism is an economic system that requires businesses to deliver value to all stakeholders including workers, customers, communities, the environment, and shareholders. This is in contrast to shareholder capitalism whose sole motive is to maximize financial value, delivering that value to shareholders which can often happen at the expense of other stakeholders. Stakeholder capitalism is about defining the role that business needs to play to help us all live in a more sustainable, inclusive, and productive society.”

I asked Kelsick if she was seeing an acceleration in the interest levels of companies, and a change in the types of companies interested in becoming B Corps or Benefit Corporations. “We are definitely seeing an acceleration in the interest levels of companies. More multinational companies are knocking on our doors than ever before. Initially, B Corps were typically small to mid-sized companies, mission-driven, purpose-led companies who were born with the DNA of social and environmental impact as part of their business model.”

Kelsick spoke to the rapidly accelerating momentum of the movement. “As visibility of the B Corp movement has grown, we still see many small to midsize companies as well as startups interested in the certification. There is also sizable growth in larger private and public companies joining the movement (e.g. Natura & Co, Danone North America, Laureate International Universities, Amalgamated Bank, and a handful of others); we’re seeing a larger variety of industries represented in our B Corp community than ever before; and we’re also seeing remarkable expansion globally. From a global perspective, B Corp Certification was born in the United States in 2006, then expanded to Latin America with the founding of our sister organization Sistema B in 2012, and has since spread to over 60 countries supported by other B Lab sister organizations in Europe, the UK, Australia, New Zealand, East Africa, and an emerging presence in Asia.”

I asked her what she thought the biggest barrier was to CEOs – was it investor resistance? “Investor resistance is indeed one of the biggest barriers. To become a B Corp, by definition, corporate directors prioritize delivering value to all stakeholders not just shareholders, and this approach is not always aligned with investor interests. Oftentimes this goes against the short-termist views that the capital markets currently demand, and so CEOs can be punished by the markets for making long-termist decisions in the interests of stakeholders if they are not prioritizing quarterly earnings targets.”

I also asked Kelsick what data she had that supported how the B Corps certification drove business results in areas like talent and retention. “B Corps are 98% more likely to hire workers from chronically underemployed populations than ordinary businesses. B Corps have hired more than 16,000 workers that traditionally have high barriers to employment. The vast majority of B Corp employees are highly satisfied with where they work: 4 out of 5 B Corps who have surveyed their employees found that more than 80% of their employees are “Satisfied” or “Engaged”.

This maybe because B Corps tend to treat their employees much better. “B Corps are 27% more likely to pay all of their workers a living wage, and 56% more likely to be majority women workers than ordinary businesses. B Corps are 18% more likely to have equal average compensation between non-managing men and women workers in comparison to ordinary businesses, and B Corps are 1.2 times more likely to have majority female management than ordinary businesses,” said Kelsick.

In closing, I asked Kelsick what success looked like. “Success for us looks like a world in which business delivers value to everyone and our economy is sustainable and inclusive. Success would look like a world in which businesses didn’t need a certification to behave responsibly. Ultimately we want to redefine what success in business means for society, to shift to a model where businesses are equipped, empowered and measured by whether they are good actors and deliver value to all their stakeholders. Our mission is to make that change happen so that it’s the cultural norm and all businesses are operating this way without barriers. And while there are signals in the market that the tides are shifting (e.g. the BRT announcement) we’ve still got a long road ahead.”